"I see this as a big success," German Industry Minister Werner Mueller said in a statement. "It is more than we would have expected not long ago."

The decision was needed to replace the European Coal and Steel Community treaty - the historic 1952 accord which paved the way for the creation of the EU - which expires next month.

Germany has invested considerable diplomatic effort securing its right to prop up the mining sector ahead of a general election in September.

Other countries, including Spain, France and Britain, provide some state aid to their coal sectors, but the biggest handouts are in Germany where mining is considered a vital employer in the Ruhr region.

The regulation agreed by ministers decrees that, as of next year, countries must gradually reduce coal aid from 2001 levels.

PHASE-OUT

Aid aimed at covering the costs of closing mines must stop by 2007, but a second category of aid - intended to support unprofitable mines - can continue until 2010.

The decision to continue allowing large scale, albeit decreasing, aid was opposed by a handful of northern European countries which oppose the support to what would otherwise be an unprofitable energy source.

Belgium and Sweden issued a formal statement expressing their concerns that although overall aid would have to be reduced, the aid to cover operating losses could, in fact rise, over the coming years.

Environmentalists have attacked the EU's willingness to go on funding an energy source which is one of the main producers of "greenhouse gases" blamed for global warming, but the EU defended its move.

"Strengthening the European Union's energy security...justifies the maintenance of coal-producing capability supported by state aid," the ministers said in the introduction to the regulation they agreed last week.

The EU is reliant on imports for 50 percent of its energy, a percentage that is predicted to rise to 70 percent by 2020. Around a quarter of EU electricity comes from coal and lignite.

The question of coal aid in the EU seems settled, at least until 2007 when the European Commission, the bloc's executive arm, reviews the policy. By then, Germany will no longer dominate the issue, Energy Commissioner Loyola de Palacio said.